5 Important Facts About Credit Reporting Agencies

5 Important Facts About Credit Reporting Agencies

It would be easy to make the argument that your credit score is the number that has the most effect on your everyday life. This number will likely change several times throughout your life. Have you ever wondered who decided what that number will be? 

What Are Credit Reporting Agencies?

Credit reporting agencies are companies that categorize and organize credit history on all individuals. They are also in charge of maintaining that all the info is current and correct. These are the organizations that assign you a credit score. 

Facts You Should Know About Credit Reporting Agencies

1. There Are 3 Major Credit Reporting Agencies

The 3 major credit reporting agencies are Equifax, TransUnion, and Experian. Your score can be different at every agency. It is also possible for information on one report to not show on all of them. 

2. You Can File Disputes

If you find that the info on your credit report is incorrect, you can file a dispute with that credit reporting agency. When you file a dispute they will reach out to the person that provided the info and ask them for proof that the info they provided is true. If they can not provide sufficient evidence the info will be removed or corrected. 

3. You Can Get a Free Copy of Your Credit Score

If you reach out to the credit reporting agencies and request a copy of your credit report, they will send you 2 free copies annually. You should be checking your credit report often to make sure the information is accurate and so that you know your current credit scores. 

4. They Sale Your Info

All the info that the credit reporting agencies have collected on your credit history is up for sale to any company that wants to inquire. This is why you receive pre-approval credit card offer so often in the mail. Companies can use your credit history to focus on what type of advertisements to send you. 

5. The Range of Credit Scores

Credit scores can be as low as 300 and as high as 850.

Score Range and Rankings

  • 300-530 — Bad
  • 530-600 — Poor
  • 600-650 — Needs Improvement
  • 650-700 — Good
  • 700-850 — Excellent

Tips to Maintain A High Credit Score

  • Pay all your debts

This one probably feels like common sense but this is often the biggest reason people’s credit scores drop. Make sure that you pay all your bills on time. Late payments can make your credit score drop. 

  • Don’t Over Use Your Credit Cards

Yes, you want to use your credit cards to acquire credit history but you never want to carry a large balance. To help your credit score never use more than 30% of your available credit line. If you only have a $1,000 limit never carry more than $300 on that balance. 

  • Never Close a Credit Line Account

Many people are not aware that closing accounts can negatively affect your credit. If you pay a card off allow it to stay open with a zero balance. This will help your age of credit and used credit ratios and approve your credit

  • Use These Facts to Help your Credit Score

Now that you know the most important facts about credit reporting agencies, you can use this knowledge to improve your credit score. Remember to always pay everything on time and be aware of how much debt you are accruing. 

Always keep an eye on your credit report so you know that all the info listed is correct. If you remember all these facts and take advantage of them, you will have an excellent credit score before you know it.